Asian stock markets on Friday followed Wall Street lower after rising US bond yields dampened buying enthusiasm driven by the US Federal Reserve’s promise of low interest rates.
Taipei, Shanghai, Tokyo, Hong Kong and Sydney retreated.
Overnight, Wall Street’s benchmark S&P 500 index closed down 1.5 percent, putting it on track for its first weekly loss in three weeks. Stocks slipped after bond yields rose, which can prompt investors to shift money out of stocks.
A day earlier, the S&P 500 hit a new high after the Fed promised to keep its key interest rate near zero through 2023 even as it forecast inflation would pick up.
“The rapid rise in long-end US yields has spooked investors,” AxiCorp Financial Services Pty chief global markets strategist Stephen Innes said.
The sell-off “caught some investors wrong-footed” after the Fed’s pledge, he said.
The MSCI Asia-Pacific Index on Friday lost 0.65 percent to 208.49 points, but rose 0.3 percent for the week.
The TAIEX on Friday lost 1.3 percent to 16,070.24 points, down 1.1 percent weekly.
The Shanghai Composite Index sank 1.7 percent to 3,404.66 points, down 1.2 percent for the week.
The Nikkei 225 in Tokyo lost 1.4 percent to 29,792.05 points, paring its weekly gain to 0.25 percent. The TOPIX on Friday inched up 0.2 percent, bringing its weekly gain to 3.13 percent.
Hong Kong’s Hang Seng Index on Friday retreated 1.4 percent to 28,990.94 points, up 0.9 percent weekly.
The KOSPI in Seoul on Friday shed 0.9 percent to 3,039.53 points, down 0.5 percent for the week.
Sydney’s S&P/ASX 200 on Friday gave up 0.6 percent to 6,708.20 points, ending the week down 0.9 percent.
India’s SENSEX on Friday gained 1.3 percent, but was down 1.8 for the week.
Also on Friday, the Bank of Japan left its easy monetary policy and goal of 2 percent inflation unchanged, but widened the band in which long-term interest rates would be allowed to rise or fall around its target to 0.25 percent from 0.2 percent.
Investors are swinging between hopes the rollout of COVID-19 vaccines would allow global business and travel to resume, and fears of possible inflation caused by government stimulus spending and easy credit.
Additional reporting by staff writer
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure